Effect of steel intensity of use on economic growth: Empirical evidence from advanced economies and emerging market and developing economies

This study examines whether the relationship between steel intensity of use and economic growth is nonlinear and differs between eleven advanced economies and ten emerging market and developing economies (EMDEs). Annual data from the World Steel Association and UNCTAD are analysed using panel feasible generalized least squares (FGLS), after tests for slope homogeneity, cross-sectional dependence, and panel unit-root properties, with country-wise FGLS estimates used to examine a precise and robust long-term relationship. The panel estimates indicate a statistically significant U-shaped relationship in advanced economies: the coefficient on per capita GDP is negative and the coefficient on its squared term is positive. For EMDEs, the corresponding signs indicate an inverted-U tendency; however, the estimated turning point lies beyond the observed income range, so the evidence is best interpreted as a positive but gradually weakening steel-growth relationship rather than confirmed decoupling. Per capita crude steel production and productive capacity are also positively associated with steel use in both panels. The findings support a development-stage-specific interpretation of steel intensity of use and imply differentiated policies: advanced economies should prioritise circularity, material efficiency, and low-carbon steelmaking, while EMDEs should combine infrastructure and industrial development with cleaner production and resource efficiency.